Sources say PSA Group to announce Opel purchase

Posted March 05, 2017

Spokespeople for PSA and Opel declined further comment.

PSA and GM are also discussing the French carmaker's ability to sell Opel vehicles globally and the United States company's right to bring Chevrolet-branded models to Europe down the line, two people said.

GM has not turned a full-year profit in Europe since 1999 and since then has lost billions battling high labor costs and an intensely competitive auto sales market.

Prime Minister Theresa May spoke with the boss of Peugeot SA to discuss the takeover bid, and the UK's business secretary, Greg Clark, has met with the French government and PSA.

In their jointly issued invitation to a Paris press conference at 0815 GMT on Monday, PSA and GM gave no indication of its subject.

The two brands that are now owned by General Motors shared numerous parts and technologies while the bowtie was sold in Europe, which led to the necessity of the non-compete restriction that may be applied to other markets where Chevy and Opel are present.

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The exact details of the agreement are unknown at this time, but the two sides reportedly made progress on Opel's pension plan, which was underfunded by about $9 billion.

PSA likely used a non-compete clause to help convince GM to pay more into the pension.

That was the 16th consecutive loss-making year for GM in Europe, bringing its cumulated losses on the continent since 2000 to more than $15bn. PSA averted bankruptcy by selling 14 percent stakes to France and Dongfeng in 2014, to match a diluted Peugeot family holding.

Nevertheless, in a statement last week, PSA boss Carlos Tavares said he believes the tie up will offer "opportunity to create a European auto champion" with annual sales of over 5 million units. The French carmaker also expects savings of up to 2 billion euros ($2.1 billion) from the tie-up, sources have said.

"It was also heartening to hear that PSA group wants to work with Unite and recognises the skill and efficiency of our members who make the world class Astra and Vivaro vans".